Mortgage Training Budgets Pinched, But There’s Money for Compliance

Mortgage companies want training they can control and track given the rise in compliance demands and related costs, as well as the decline in both origination volumes and margins. Image: Fotolia

Mortgage professionals these days only want training that helps with revenue and/or compliance. And it better be efficient, industry vendors say.

“They want what will make them better at their job,” says Alice Alvey, senior vice president at Indecomm-Mortgage U, who says that decisions about training today are increasingly about maximizing “seat time” in term of how much work employees get done during their time in the office.

Mortgage companies have tended to seek out training only for specific purposes in the past and this remains true, but now they also want training they can control and track given the rise in compliance demands and related costs, as well as the decline in both origination volumes and margins.

They are more interested in using technology-assisted learning management systems as a result, although lenders remain far beyond larger, global companies in different industries in this respect, says Alvey.

The industry has often turned to automation as a means of cost savings given increased regulation and decreased origination revenues, but in the training world companies fail to find this alone compelling, says Jim Blatt, CEO of marketing consulting and technology provider Mortgage Returns.

“People don’t just wake up in the morning and say, ‘What can I be trained on today?’ They say, ‘How can I maximize our revenue?’”

Mortgage Returns asks potential clients to provide it with 20-30 pieces of data and uses it to produce revenue metrics to show how training on its technology improves, for example, customer retention, Blatt says. This is what its lender clients find compelling because they can directly improve their profitability, in part by creating efficiencies.

“Just dropping off the technology is not enough” to achieve this, Blatt says. “We provide training.”

The training covers best practices and emphasizes that the company’s marketing profile needs to be adjusted on a quarterly basis to account for changes in borrower demand, rather than a more long-term plan such as some companies choose.

Demand can shift greatly over time, as the recent move toward a purchase market has shown, he notes. Attendance in a class where originators receive training in how to improve their purchase origination skills has tripled over the past year, he says.

Mass marketing can work, but maximizing revenue in terms of return on investment in technology requires a more customized approach, Blatt says.

Other professional education that can help when the market is slower include cross-training as it can help lenders move valued staff with diminishing work roles into more active departments, says Alvey.

Mentoring across department lines also may be helpful. Wipro Gallagher Solutions found using mentors from departments other than the one the new employee is entering helped speed implementation of compliance ahead of new Consumer Financial Protection Bureau rules coming in January.

“It has helped us get ready for regulations and conversations we are having with our clients about them,” says Teresa Blake, practice director at WGS, an industry consulting and technology services provider.

“We pair each new hire up with a peer in another (function) so that they can ask questions maybe they wouldn’t want to ask their boss,” she says.

The mortgage outsourcing and technology provider also has recommended the approach to its lender clients.

The company has given mentors some best practices and then allowed them to use meetings with the staff, a “shadowing” process, or a mix of the two as they choose. There is a required mentoring period that generally lasts for a matter of months but some pairs voluntarily continue to collaborate on business strategies after it ends.

WGS also belongs to the Mortgage Bankers Association and sends some employees through the MBA’s training program so that those staff members can get professional designations.

“It’s worth the investment,” says Blake of the training the company provides its employees, noting that the payoff comes in the form of improved staff retention, more efficient operations and better understanding of client needs. The percentage of employee turnover has gone to single-digits from the high teens, she says.

Another type of training that can have value in a slower market is automated professional education for employee on-boarding that occurs during consolidation as companies merge with or acquire each other, Alvey says.